|
ASIA
will continue to weather the prevailing weakness in the
global financial market and provide attractive
investment opportunities, a study conducted by one of
the world’s leading investment banks, ING, revealed.
“Asian
economies will remain robust despite the
financial-market volatility around the world. We don’t
think that Asian economies will not be impacted but we
think that the impact will be modest and that there is
no country in Asia where we are forecasting a
recession,” said its regional head for equity Nick
Toovey.
According to him, interregional trade and domestic
demand will help drive economic growth in Asia and
markets in the region will remain resilient. “We think
that the GDP growth will be impacted marginally and we
expect Asia to post strong GDP growth between 3 percent
and 9 percent for 2008.”
He
granted, though, that 2008 is going to be a challenging
year for investors everywhere. “The
US
is falling into recession. The European economies are
also facing headwinds because they have an appreciating
currency and interest rates which are unlikely to
decline. Coming to Asia, we think that domestic
economies are much stronger than they have ever been and
so we think that medium to long-term, Asia will be the
favorite investment destination.”
The
Philippines may be in for a different scenario, however.
Paul
Jose Garcia, ING chief investment officer in the
Philippines,
said they are reviewing the macroeconomic forecast and
it is possible they may be subjected to downside risks
in terms of revisions.
“The
reason for that is there are a lot of headwinds that
Asian economies are facing and also markets are pretty
challenging at the moment. Going forward, we [are] not
going to see the same kind of appreciation that we saw
for the peso and other regional currencies in
Asia.”
“Our
view is that towards the end of the year and early next
year, we are going to see possibly a rebound for the
dollar and therefore we may not see the peso
appreciating as much compared to previous years,” said
Garcia.
He said
the rice crisis would also have a negative impact on the
GDP growth this year.
He
added, however, that the usual overseas remittance will
always be there although at the same time, the same
phase of inflows particularly coming from portfolio
investments may not be expected.
“The 6.8
to 7 percent growth target of the government this year
may not be realistic at this time. In fact, we might see
GDP growth possibly at high 5 percent for this year. But
still compared to the rest of the region in Asia, that
should still be respectable growth,” he said.
In terms
of inflation, Garcia said commodity prices will continue
to put pressure on headline inflation.
ING
remains positive on the local equities market. “At the
moment we are currently reviewing our earnings forecast
for the corporates. We’ll have to take into account the
impact of higher crude prices, rice costs, minimum wage
hike and transport fares. However, we believe the
corporate sector remains resilient despite the
challenges.”
Over the
next 12 months, Garcia sees the PSE index to level
between 3,600 and 3,800. |
